A collaborative project between the Pensions Policy Institute (PPI), the University of East Anglia (UEA) and the London School of Economics (LSE), funded over two years by the Nuffield Foundation, investigating the long-term impacts of both long term care and state pension reforms and their potential interactions.

Background

Major reforms to state pensions have been implemented (April 2016) and the long-term care reforms which were also planned to be implemented in 2016 have been postponed (now planned for 2020) in Great Britain and England respectively. Their combined effects have received little attention despite interactions between the two systems. The long-term effects of both sets of reforms will depend on how details of the systems are set in the intervening years, and on how policies in other parts of the welfare system evolve. The project investigates the long-term impacts of alternative ways in which current pensions and long-term care financing reforms may evolve over the next 40 years to ensure that that there is widespread appreciation of the implications of any changes that may have significant long-term effects.

Analysis of the combined effects of the reforms can inform long-term care policy in Scotland and Wales as well as England. We compare the cumulative effects of small, incremental and less noticeable changes (e.g. uprating for inflation) with equivalent cost but more visible step changes in system parameters (e.g. changes to the level of the cap in long-term care). For this, we are developing and applying linked computer models of pensions and long-term care finance that each of the three organisations involved have developed and applied over many years.

Publications

July 2018 - Care and State Pension Reform: The interaction of inflation indices